REPUBLIC OF LITHUANIA

REPUBLIC OF LITHUANIA Official translation REPUBLIC OF LITHUANIA LAW ON TAX administration 13 April 2004 No IX-2112 (As last amended on 3 July 2007 - X-1249) Vilnius CHAPTER I GENERAL PROVISIONS Article 1. Purpose of the Law 1. This Law shall establish the basic concepts and regulations which must be observed in implementing the tax laws of the Republic of Lithuania, the basic principles of legal regulation of taxation, the list of taxes applied in the Republic of Lithuania, the functions, rights and obligations of the tax administrator, the rights and obligations of the taxpayer, the calculation and payment of taxes, the procedure of enforced recovery of taxes and related amounts as well as the procedure for the settlement of tax disputes. 2. This Law shall also ensure the implementation of the EU legal acts listed in the Annex hereto. Article 2. Definitions 1. Summarised explanation of the tax law shall mean the opinion presented, after coordination with the Ministry of Finance, by the central tax administrator or an institution authorised for the purpose under this Law on how the tax administrator or the aforementioned institution understands and applies the provisions of the tax law. 2. Person shall mean a natural person or a legal person. Any organisation of a foreign state recognised as having legal personality under the laws of the Republic of Lithuania or a foreign state shall be treated as a legal person. 3. Budget shall mean a state budget, municipal budgets and also monetary funds to which the taxes specified in Article 13 of this Law are paid (allocated) in accordance with a procedure prescribed by legal acts. 4. Tax consultancy shall mean any explanation provided by the tax administrator on a case-by-case basis to a specific taxpayer in relation to the taxes paid (due to be paid) by the latter. 5. Credit institution shall be interpreted as defined in the Law of the Republic of Lithuania on Financial Institutions; it shall also mean the Bank of Lithuania. 6. Tax return shall mean a document submitted by the taxpayer to the tax administrator which contains information about the amount of self-calculated tax for the period established in the tax law, also other data related to the calculation and payment of tax. 7. Tax law shall mean a law of the Republic of Lithuania establishing the taxes listed in Article 13 hereof, the present Law, the Customs Law, also an international treaty of the Republic of Lithuania or the Community customs legislation establishing taxes and/or defining issues related to the application of taxes or tax reliefs. 8. Tax relief shall mean special taxation conditions established in respect of the taxpayer or a group of taxpayers that are more favourable than the usual conditions of taxation. 9. Tax arrears shall mean an amount of the tax not paid in due time by the taxpayer in accordance with the procedure laid down in the tax law or a subordinate legal act adopted on the basis thereof. 10. Tax overpayment shall mean an amount of tax paid by the taxpayer in excess of the tax amount prescribed. 11. Tax difference shall mean an amount to be refunded (credited) from the budget to the taxpayer, which may arise when completing a tax return in accordance with the procedure laid down in the tax law. 12. Tax administrator shall mean a state institution or agency responsible for the administration of taxes, which has the powers conferred upon it by law to act in the field of tax administration. 13. Tax administration shall mean performing the functions of the tax administrator, also discharging the obligations and exercising the rights of the tax administrator and the taxpayer as specified in the tax law and other laws. 14. Tax administration procedure shall mean the acts performed by the tax administrator for the purpose of fulfilling its functions, also the acts performed by the tax administrator and the taxpayer for the purpose of discharging their obligations and exercising their rights established in tax laws. 15. Taxpayer shall mean a person having an obligation under the tax law to pay taxes. Under this Law, the withholding agent shall be deemed to be a taxpayer, i.e. the provisions of the Law shall apply to the former in the same manner as to the latter, with the exception of explicitly prescribed special cases. With regard to customs duties, the taxpayer shall be deemed to be a person having an obligation to pay a customs debt (hereinafter referred to as the “debtor”). 16. Withholding agent shall mean a person charged under tax legislation to withhold taxes from the taxpayer and pay it to the budget. 17. Arrears in payments shall mean tax arrears and other tax related amounts not paid in due time by the taxpayer in accordance with the procedure laid down in the tax law or a subordinate legal act adopted on the basis thereof. 18. Tax obligation shall mean a taxpayer’s duty under the tax law to calculate the tax correctly, pay the tax and related amounts to the budget in due time and perform all other duties related to the calculation and payment of taxes. 19. Tax instalment agreement shall mean an agreement concluded on the basis of a decision made by the tax administrator to defer (spread) the discharge of arrears in payments, providing for the payment schedule and other deferral conditions. 20. Tax disputes shall mean disputes arising between the taxpayer and the tax administrator over a decision on the approval of an inspection report or any other similar decision on the basis of which the tax is calculated anew and the taxpayer is instructed to pay it, also over a decision made by a tax administrator to refuse the refund (crediting) of a tax overpayment (tax difference). 21. Tax inspection shall mean an inspection conducted by the tax administrator in respect of the taxpayer to control the taxpayer’s compliance with the requirements prescribed by tax laws in the fields of calculation, declaration and payment of taxes and, in the cases prescribed by law, in other fields as well. 22. Tax investigation shall mean monitoring the tax payer’s activities by the tax administrator, which includes an analysis of tax returns, customs declarations, documents and any other information available about the tax payer, also visiting taxpayers, controlling their activities with a view to identifying and eliminating any deficiencies and contradictions in respect of the calculation, declaration and payment of taxes. 23. Tax shall mean a pecuniary obligation in respect of the state imposed on the taxpayer by the tax law. For the purpose of this Law, the concept of tax shall also include the payments and levies specified in Article 13. 24. Customs duties shall mean import duties and/or export duties as defined in Article 4 of the Community Customs Code. 25. Mutatis mutandis  shall mean a legal concept meaning “with the necessary changes”. 26. Tax related amounts shall mean late payment interest, penalties, interest paid under a tax instalment agreement and late payment penalties on such interest. 27. The terms used in paragraphs 1-25 of this Law shall be interpreted as defined above, unless the relevant tax law provides otherwise. 28. Other terms used in tax laws shall be defined in separate articles of this Law and the relevant tax laws. 29. Under this Law, the Community customs legislation shall be: 1) Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (hereinafter referred to as the “Community Customs Code”) (OJ 2004 special edition Chapter 2, Volume 4, p. 307) (as last amended by Regulation (EC) No 648/2005 of the European Parliament and of the Council of 13 April 2005) (OJ 2005 L 117, p. 13). 2) Council Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (hereinafter referred to as the “provisions for the implementation of the Community Customs Code”) (OJ 2004 special edition Chapter 2, Volume 6, p. 3) (as last amended by Commission Regulation (EC) No 402/2006 of 8 March 2006) (OJ 2006 L 70, p. 35). 3) Council Regulation (EEC) No 918/83 of 28 March 1983 setting up a Community system of reliefs from customs duty (OJ 2004 special edition Chapter 2, Volume 1, p. 419) (as last amended by Council Regulation (EC) No 1671/2000 of 20 July 2000) (OJ 2000 L 193, p. 11). 4) Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 2004 special edition Chapter 2, Volume 2, p. 382) (as last amended by Commission Regulation (EC) No 996/2006 of 29 June 2006) (OJ 2006 L 179, p. 26). 5) other EC Council and Commission legal acts and international treaties concluded or acceded to by the European Community regulating the procedure of importing goods into the Community customs territory from third countries and exporting from the said territory to third countries as well as the procedure for the application of import and export duties on such imported and exported goods. CHAPTER II LEGAL REGULATION OF TAXES. IMPLEMENTATION OF TAX LAWS Article 3. Legal Regulation of Taxes 1. The system of tax legislation shall comprise tax laws and subordinate legal acts adopted on their basis. 2. Any tax falling within the national competence of the Republic of Lithuania can be established only by law. 3. The Seimas of the Republic of Lithuania shall ensure that the tax laws of the Republic of Lithuania establishing a new tax, a new tax rate, a tax relief and/or sanctions for violations of tax laws or substantially amending the procedure of specific taxation or the principles of the legal regulation of taxation and their application should come into effect not earlier than within six months after the day of their publication. 4. Paragraph 3 of this Article shall not apply to the amendments of tax laws of the Republic of Lithuania related to the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets and to legal acts approximated with the provisions of EU legislation. 5. All contradictions and ambiguities of the tax legislation of the Republic of Lithuania shall be interpreted in favour of the taxpayer. Article 4. Tax Reliefs 1. Tax relief (reliefs) shall be established only by the relevant tax law regulating the procedure of tax calculation. This Law may establish reliefs in respect of taxes, penalties or late payment interest, which are not related to the procedure of tax calculation or the tax rate. Temporary tax reliefs falling within the national competence of the Republic of Lithuania may also be established by special laws on tax reliefs adopted by the Seimas of the Republic of Lithuania. 2. A special law on tax reliefs shall be a law allowing exceptions to the taxation procedure, which are not provided for in the tax laws listed in Article 13, adopted exclusively for the purpose of granting these reliefs. Article 5. Principle of Supremacy of International Treaties 1. Where the rules of taxation laid down in the international treaties of the Republic of Lithuania are other than stipulated in the relevant tax laws and where such treaties are ratified, brought into effect and applied in the Republic of Lithuania, the rules set forth in the aforementioned international treaties shall have primacy over respective national legislation. 2. With regard to customs duties, the provisions of paragraph 1 of this Article shall apply in so far as they do not contravene the Community customs legislation. Article 6. Principles of Legal Regulation of Taxation and Their Application The following shall be the basic principles for the legal regulation and application of taxation: equality of taxpayers, fairness and universal obligation, clarity of taxation, and precedence of content over form. Article 7. Principle of Equality of Taxpayers Where tax laws are applied, all taxpayers shall enjoy the equality of treatment stemming from the conditions established by these laws. Article 8. Principle of Fairness and Universal Obligation 1. Each taxpayer must pay the taxes established by tax laws, acting in accordance with the procedure of calculation and payment of taxes laid down in tax legislation. 2. Tax reliefs falling within the national competence of the Republic of Lithuania may not be of an individual character or in violation of a proportional distribution of the tax burden. 3. For the purpose of tax administration, the tax administrator shall observe the criteria of prudence and fairness. Article 9. Principle of Clarity of Taxation The content of a tax obligation, the procedure of and the grounds for its commencement, discharge and cessation shall be clearly defined in the tax legislation of the Republic of Lithuania. Article 10. Precedence of Content over Form In respect of taxes, the content of the activities carried on by the participants of legal relations shall take precedence over their form. Article 11. Implementation of Tax Laws Subordinate legal acts implementing the tax laws shall be adopted by the Government of the Republic of Lithuania or by the Ministry of Finance under mandate from the Government. Where dealing with issues falling within their spheres of competence, the Government of the Republic of Lithuania and the Ministry of Finance may assign the central tax administrator to adopt subordinate legal acts laying down the relevant rules on the implementation of tax laws. Other institutions may be assigned to implement the tax law only in cases authoritative under tax laws. Article 12. Interpretation of Tax Laws 1. Summarised explanations of tax laws shall be presented and published by the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania, after coordination with the Ministry of Finance. Summarised explanations of the laws regarding taxes administered by the Ministry of Environment or an institution authorised by it, the Customs of the Republic of Lithuania, the Ministry of Agriculture or an institution authorised by it shall be presented and published by the Ministry of Environment, the Customs Department under the Ministry of Finance (hereinafter referred to as the “Customs Department”) and the Ministry of Agriculture respectively, after coordination with the Ministry of Finance. 2. A summarised explanation of the tax law shall not be legally binding on the taxpayer and shall express an opinion of a competent state authority as regards issues regulated by tax laws. 3. For the purpose of educating, consulting and controlling the taxpayers on issues relating to the payment of taxes, the tax administrator shall take into account the summarised explanation of the relevant tax law. CHAPTER III TAXES Article 13. Taxes The following taxes shall be administered under this Law: 1) value added tax; 2) excise duties; 3) personal income tax; 4) immovable property tax; 5) land tax; 6) state natural resources tax; 7) petroleum and gas resources tax; 8) tax on environmental pollution; 9) consular fees; 10) stamp duty; 11) (repealed on 01.07.05); 12) inheritance tax; 13) compulsory health insurance contributions; 14) contributions to the Guarantee Fund; 15) state-imposed fees and charges; 16) lottery and gaming tax; 17) fees for the registration of industrial property objects; 18) corporate income tax; 19) state social insurance contributions; 20) tax on a surplus amount in the sugar sector; 21) production charge in the sugar sector; 22) (repealed on 26 April 2007); 23) customs duties; 24) deductions from income under the Law of the Republic of Lithuania on Forestry; 25) tax on the use of state property by the right of trust; 26) social tax; 27) temporary tax for sugar industry restructuring; 28) one-off tax on additional quota for white sugar production and on supplementary quota for isoglucose production. Article 14. Application of Tax Administration Procedures Provided for in this Law 1. The tax administration procedures provided for in this Law shall be applied in respect of all taxes specified in Article 13 of this Law and the taxpayers thereof, unless this Law or the relevant tax law provide otherwise. 2. The stamp duty referred to in subparagraph 10 of Article 13 of this Law shall be administered under this Law only to the extent determined by the Code of Civil Procedure of the Republic of Lithuania. 3. State-imposed fees and charges referred to in subparagraph 15 of Article 13 shall be administered under this Law only to the extent determined by the Law of the Republic of Lithuania on Fees and Charges. 4. Fees for the registration of industrial property objects referred to in subparagraph 17 of Article 13 shall be administered under this Law only to the extent determined by the Law of the Republic of Lithuania on Fees for the Registration of Industrial Property Objects. 5. State social insurance contributions referred to in subparagraph 19 of Article 13 shall be administered under this Law only to the extent determined by the Law of the Republic of Lithuania on State Social Insurance. 6. Customs duties referred to in subparagraph 23 of Article 13 shall be administered under this Law only to the extent that they do not contravene the Community customs legislation. CHAPTER IV PARTICIPANTS OF LEGAL RELATIONS IN TAX ADMINISTRATION SECTION I TAX ADMINISTRATORS. THEIR FUNCTIONS, RIGHTS AND OBLIGATIONS Article 15. Tax Administrator 1. The state institution responsible for the administration of taxes specified in Article 13 of this Law in the Republic of Lithuania, with the exception of customs duties, shall be the State Tax Inspectorate. 2. The Customs of the Republic of Lithuania (hereinafter referred to as the “Customs”) shall be responsible for the administration of customs duties in the Republic of Lithuania. The Customs shall administer the taxes referred to in subparagraphs 1 and 2 of Article 13 to the extent assigned by the Law on Value Added Tax and the Law on Excise Duty. Unless this Law or any other legal acts provide otherwise, the Customs administering the customs duties and the taxes specified in this paragraph shall be considered to be the tax administrator, the Customs Department shall be considered to be the central tax administrator, and the territorial customs office and the special customs office (where performance of tax administration functions is provided for in its Articles of Association) shall be considered to be local tax administrators. 3. No other state institutions or agencies may perform the functions of the tax administrator, except for the cases explicitly stated in this Law or the relevant tax law. Article 16. State Institutions and Agencies Authorised to Perform Certain Actions of Tax Administration 1. The taxes referred to in paragraphs 6, 7, 8 and 24 of Article 13 of this Law shall be administered by the Ministry of Environment or an institution authorised by it, but only to the extent assigned by the Law on State Natural Resources Tax, the Law on Environmental Pollution Tax, the Law on Petroleum and Gas Resources Tax, and the Law on Forestry. Only the Ministry of Environment or an institution authorised by it shall verify whether the taxes referred to in paragraphs 6 and 8 of Article 13 of this Law have been correctly calculated, declared and paid, and shall also provide the relevant tax consultancy. 2. The taxes referred to in paragraphs 20, 21, 27 and 28 of Article 13 of this Law shall be administered by the Ministry of Agriculture, or an institution authorised by it, but only to the extent assigned by the Law on Production Charge in the Sugar Sector, Law on the Tax on a Surplus Amount in the Sugar Sector, the Law on Temporary Tax for Sugar Industry Restructuring and the Law on One-off Tax on Additional Quota for White Sugar Production and on Supplementary Quota for Isoglucose Production. Only the Ministry of Agriculture, or an institution authorised by it, shall be responsible for correct calculation of taxes and shall also provide consultations on tax related issues.  The State Tax Inspectorate shall control tax declaration and payment. 3. The provisions of this Law shall not apply with regard to the procedure of verifying the correctness of tax calculation, declaration and payment as performed by the institutions and agencies referred to in paragraphs 1 and 2 of this Article, the documentation and approval of verification results, and any appeals against actions by such institutions and agencies as well as by their officers. The aforementioned legal relations shall be governed by the legal acts regulating the activities of these institutions and the relevant laws on administered taxes. Article 17. State Tax Inspectorate 1. The State Tax Inspectorate shall be an institution established under the Ministry of Finance of the Republic of Lithuania. 2. The State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania (hereinafter referred to in this Law and other legal acts as the “State Tax Inspectorate under the Ministry of Finance”) and local tax inspectorates shall be budget-financed institutions having their own bank accounts, seals and common symbols. 3. The State Tax Inspectorate shall act in compliance with the Constitution of the Republic of Lithuania, this Law, other laws, subordinate legal acts and its own regulations. The regulations of the State Tax Inspectorate under the Ministry of Finance shall be approved by the Minister of Finance, while the regulations of local tax inspectorates shall be approved by the Head of the State Tax Inspectorate under the Ministry of Finance. Article 18. Structure of the State Tax Inspectorate The State Tax Inspectorate shall be comprised of: 1) the State Tax Inspectorate under the Ministry of Finance - the central tax administrator; 2) local tax inspectorates - local tax administrators. Article 19. Tasks of the State Tax Inspectorate 1. The main tasks of the State Tax Inspectorate shall be: 1) to assist the taxpayers in exercising their rights and performing their obligations; 2) to implement tax laws; 3) to ensure the payment of taxes to the budget. 2. The tasks of the State Tax Inspectorate shall be implemented when the central and local tax administrators perform the functions assigned to them by law. Article 20. Work Organisation of the State Tax Inspectorate under the Ministry of Finance 1. The State Tax Inspectorate under the Ministry of Finance shall be directed by the head of the State Tax Inspectorate. He shall be appointed and dismissed from office by the Minister of Finance in accordance with the procedure laid down in the Law on Civil Service. 2. The structure of the State Tax Inspectorate under the Ministry of Finance shall be approved by its head, after coordination with the Minister of Finance. 3. The State Tax Inspectorate under the Ministry of Finance shall be subordinate and accountable to the Ministry of Finance. Article 21. Work Organisation of Territorial State Tax Inspectorates 1. The number and areas of activity of local tax inspectorates shall be established by the Minister of Finance, acting on a recommendation from the Head of the State Tax Inspectorate under the Ministry of Finance. 2. The structure of local tax inspectorates shall be approved by the Head of the State Tax Inspectorate under the Ministry of Finance. 3. The head of a local tax inspectorate shall be appointed and dismissed from office by the Head of the State Tax Inspectorate under the Ministry of Finance in accordance with the procedure laid down in the Law on Civil Service. 4. The local tax inspectorate shall be subordinate and accountable to the State Tax Inspectorate under the Ministry of Finance. Article 22. Civil Servants of the State Tax Inspectorate 1. Civil servants of the State Tax Inspectorate shall be appointed and dismissed from office by the head of the employing tax inspectorate in accordance with the procedure laid down in the Law on Civil Service. 2. Working and remuneration conditions as well as social guarantees of the civil servants of the State Tax Inspectorate shall be laid down in the Law on Civil Service, other laws and subordinate legal acts. Article 23. Customs The legal status of the Customs and its officers shall be regulated by the Law on Customs and the Statute of Service in the Customs of the Republic of Lithuania. Article 24. Organisation of Training for Officials by the Tax Administrator 1. The State Tax Inspectorate under the Ministry of Finance shall have an obligation to organise the training (in-service training) of its officers according to the training programmes developed for that purpose. 2. The State Tax Inspectorate under the Ministry of Finance must ensure a continuous in-service training for all of its officers. 3. Newly recruited tax officers must attend a course of initial training on the general issues of taxes and their administration. 4. The training of customs officers shall be organised in accordance with the Law on Civil Service, the Statute of Service in the Customs of the Republic of Lithuania, and other legal acts regulating customs activities. Article 25. Functions of the Central Tax Administrator 1. Within its sphere of competence, the central tax administrator shall perform the following main functions: 1) organise education and consultancy for taxpayers; 2) provide summarised explanations of tax laws, after coordination with the Ministry of Finance; 3) set forth the priorities and procedures for servicing taxpayers; 4) establish the accounting procedures to be followed by the local tax administrator in respect of tax obligations and discharged taxes and control compliance therewith; 5) establish the procedures for refunding (crediting) tax overpayments (tax differences) as well as taxes, penalties and late payment interest recovered without due grounds (in an unjustified manner); 6) set forth the priorities and procedures for exercising control over the correct calculation, declaration of payment of taxes; 7) exercise control over the correct calculation, declaration and payment of taxes; 8) set forth the priorities and procedures for recovering arrears in payments; 9) consider tax disputes; 10) settle issues relating to the application of mutual agreement procedures under double taxation treaties concluded and brought into effect by the Republic of Lithuania or under the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (90/436/EEC). This function shall be performed only by the State Tax Inspectorate under the Ministry of Finance acting in the capacity of the central tax administrator; 11) represent the interests of the State in courts and other institutions; 12) collect and summarise the best practices of tax administration procedures and introduce them to local tax administrators; 13) adopt and draft subordinate legal acts on taxation under mandate from the Seimas of the Republic of Lithuania, the Government and the Ministry of Finance; 14) adopt subordinate legal acts falling within the competence of the central tax administrator; 15) submit proposals to the Ministry of Finance concerning the implementation of tax laws and other legal acts and the improvement of tax administration; 16) cooperate with Lithuanian and foreign state, public, international and other institutions and agencies; 17) cooperate, in the capacity of a competent authority, with the tax administrations (competent authorities) of foreign states; 18) coordinate, control and give methodological instructions to the local tax administrator and periodically assess its performance; 19) manage the register of taxpayers. This function shall be performed only by the State Tax Inspectorate under the Ministry of Finance acting in the capacity of the central tax administrator; 20) formulate the policy of the taxes paid to the budget and keep accounts of the taxes paid to the budget. 2. The other functions of the central tax administrator shall be set out in its own regulations, this and other laws and subordinate legal acts. Article 26. Functions of the Local Tax Administrator 1. Within its sphere of competence, the local tax administrator shall perform the following main functions: 1) provide consultancy to the taxpayer on the payment of taxes and supply information about laws and legal acts concerning tax matters; 2) receive tax returns and other accounting documents from the taxpayer and issue relevant documents certifying the submission of tax returns and other actions by the taxpayer; 3) keep accounts of the taxes paid to the budget; 4) register taxpayers and manage the register of taxpayers. This function shall be performed only by the local tax inspectorate acting in the capacity of a local tax administrator; 5) allocate tax amounts among budgets in accordance with the procedure prescribed by law; 6) implement the decisions of municipal institutions concerning the application of reliefs in respect of the taxes paid to the municipal budget. This function shall be performed only by the local tax inspectorate acting in the capacity of a local tax administrator; 7) exercise control over the correct calculation, declaration and payment of taxes; 8) provide an expert’s opinion on the calculation, declaration and payment of taxes subject to the provisions of the Code of Criminal Procedure of the Republic of Lithuania; 9) enforce the recovery of arrears in payments; 10) refund (credit) tax overpayments (tax differences) as well as illegally recovered taxes, late payment interest and penalties to taxpayers; 11) cooperate and exchange information with other Lithuanian tax administrators, state and municipal institutions and agencies in accordance with the established procedure. 2. Other functions of the local tax administrator shall be set out in its own regulations, this and other laws and subordinate legal acts. Article 27. Cooperation between the Tax Administrator and the Taxpayer 1. For the purpose of assisting the taxpayer to exercise his rights and discharge his obligations, the tax administrator, within its sphere of competence, shall: 1) educate the taxpayers and provide tax consultancy across the Republic of Lithuania; 2) prepare user-friendly tax returns, supply taxpayers free of charge with such forms, approve and explain the procedure of completing tax returns; 3) provide information, in accordance with the administrative procedure, about the possibility of appealing against actions by tax officers maintaining direct contacts with the taxpayer; 4) organise meetings with taxpayers and representatives of their associations or other organisations representing their interests; 5) cooperate in any other way with taxpayers and seek mutual understanding. 2. Where cooperating with the tax administrator, the taxpayer shall voluntarily discharge his obligations under tax legislation and shall not preclude the tax administrator from exercising its rights granted by law. Article 28. Cooperation with Tax Administrators of Foreign States 1. The central tax administrator shall cooperate with the tax administrations (competent authorities) of foreign states on the basis of international treaties or agreements. 2. Unless an international treaty or agreement provides otherwise, assistance to the tax administration (competent authority) of a foreign state shall be provided only under conditions of reciprocity and provided that: 1) a request is made concerning the required assistance; 2) assurance is provided that the information supplied will be used solely for the purpose of taxation or investigation of violations of tax legislation; 3) the fulfilment of the request will not violate the legitimate interests of the Republic of Lithuania or its subjects or entities and no state, official, professional, commercial or other type of secret information protected by law will be disclosed; 4) the secrecy of information is ensured; 5) the requesting foreign state institution has exhausted all conventional means to achieve the objective in respect of which the request has been made. 3. If the central tax administrator refuses to provide information or assistance, it shall notify the requesting institution of the reasons for refusing to do so. 4. When providing assistance to the tax administrations (competent authorities) of foreign states, the tax administrator shall have the same rights in respect of taxpayers or third persons as when performing the other functions assigned to it. 5. The central tax administrator shall, within its sphere of competence and taking into account the provisions of the relevant international treaties and agreements, establish a detailed procedure for implementing this Article. Article 29. Cooperation with Tax Administrations (Competent Authorities) of European Union Member States 1. The central tax administrator shall, within its sphere of competence, cooperate with the tax administrations (competent authorities) of EU Member States when exchanging information about taxpayers, conducting joint inspections and recovering arrears in payments at the request of the tax administrations (competent authorities) of EU Member States or addressing the said authorities concerning the recovery of arrears in payments. Cooperation shall be carried out on the grounds provided for in paragraph 1 of Article 28 of this Law. 2. The central tax administrator may exchange any information with the tax administrations (competent authorities) of EU Member States where such information may enable them to effect a correct calculation of taxes and investigate violations of tax laws. Information may be exchanged: 1) on request in a particular case; 2) regularly (automatic exchange of information) without prior request; 3) in cases provided for in agreements on administrative cooperation where the designated institutions are allowed to communicate directly with each other; 4) in cases provided for in agreements on administrative cooperation where an officer of a competent authority of another Member State is allowed to participate in the process of collecting information; 5) by forwarding information, of which its has knowledge, without prior request in at least one the following circumstances: tax is not paid in another Member State or it is paid incorrectly; the taxpayer is subject to tax reliefs or is exempt from tax which would give rise to an increase in tax or to liability to tax in another Member State; transactions are carried out between taxpayers in one or several Member States in such a way that tax is not paid in either or both of the Member States; tax may not be paid as a result of artificial distribution of income among associated (related) economic entities; information forwarded to the central tax administrator by the tax administration (competent authority) of another EU Member State has enabled data to be obtained which may be relevant for taxation in the forwarding Member State. 3. Requests by the tax administrations (competent authorities) of EU member states for assistance in recovering arrears in payments shall be examined and met in compliance with the procedure laid down in the Law of the Republic of Lithuania on Providing Assistance to the Institutions of EU States for the Recovery of Claims relating to Levies, Customs Duties, Taxes and other Monetary Amounts and Using the Assistance Provided by the Institutions of the European Union Member States for the Recovery of the Said Amounts. The amounts indicated in the requests, where the tax administrator bears responsibility for their recovery in accordance with the provisions of the aforementioned law, shall be recovered as arrears in payments in accordance with the procedure laid down this Law. 4. Unless EU legal acts or the relevant international treaties provide otherwise, the principles specified in paragraph 2 of Article 28 of this Law shall apply for the purpose of cooperation with the tax administrations (competent authorities) of EU Member States. 5. The provisions of paragraphs 3, 4 and 5 of Article 28 of this Law shall also apply for the purpose of cooperation with the tax administrations (competent authorities) of EU Member States. Article 30. Cooperation with Other Agencies and Institutions of the Republic of Lithuania and Foreign States 1. Where performing its functions, the tax administrator shall cooperate with other state and municipal institutions and agencies of the Republic of Lithuania and institutions of foreign states and shall also conduct joint inspections and perform other control functions as well as ensure the exchange of information. 2. The state and municipal institutions and agencies of the Republic of Lithuania must provide comprehensive assistance to the tax administrator and submit information about any acts comprising elements of a tax law violation as soon as they become aware of the fact in the course of performing their functions. Article 31. Cooperation with Other Persons In order to perform its functions more effectively, the tax administrator may conclude agreements on the transfer of certain functions, receipt of services or other issues as well as memoranda of mutual agreement with persons other than specified in Articles 27-30 of this Law. Article 32. Duties of the Tax Administrator When performing the functions assigned to it, the tax administrator (officer) must: 1) promote the voluntary payment of taxes; 2) respect the taxpayer’s rights; 3) strictly comply with tax legislation; 4) within its sphere of competence, protect the legitimate interests of the State; 5) ensure the secrecy of information about the taxpayer; 6) exercise its rights only to the extent related to the functions assigned to it; 7) when performing its functions, make an effort not to impede the taxpayer’s activities; 8) perform other functions set out in this and other laws and in subordinate legal acts. Article 33. Rights of the Tax Administrator When performing the functions assigned to it, the tax administrator (officer) shall have the right: 1) to obtain from persons, including credit institutions, the data required for the performance of its obligations, copies of documents, computer file data (copies thereof) concerning the assets, income, expenses and activities of this or another person and to use information from the registers and databases administered and managed by itself or other legal persons; 2) to have access to the taxpayer’s territory, buildings and premises in accordance with the procedure laid down in this Law; 3) to temporarily take away the taxpayer’s accounting documents necessary to verify the correctness of calculations made in respect of taxes and transactions and to conduct a tax investigation; 4) to stamp and/or seal areas, premises and installations used for the safekeeping of documents, securities, money and material valuables; to close the territory or parts thereof; 5) to take samples or specimens of products (goods), to make control purchases; 6) to mark the taxpayer’s documents to prevent their counterfeiting; 7) to give mandatory instructions to taxpayers and other natural or legal persons (where related to exercising the rights of a tax administrator in respect of the taxpayer) to visit the tax administrator, provided that this is necessary for the latter to perform its functions; to issue instructions concerning the calculation, declaration and payment of taxes, the declaration of property and income, and the keeping of accounts; 8) to enforce the recovery of arrears in payments from persons; 9) within its sphere of its competence, to complete protocols of administrative offences and perform other actions provided for in the Code of Administrative Offences, to impose other administrative sanctions and penalties prescribed by law; 10) to carry out personally or require other competent authorities to carry out control measurements, to check computer programmes and their data, to take the inventory of material valuables, and conduct other inspections; 11) to install meters and other measuring devices in the taxpayer’s storage facilities, warehouses and other facilities used for operations; 12) in the event of a suspicion of violation of legal acts the responsibility for the implementation of which is borne by the tax administrator, to stop and inspect the means of transport as well as to detain and check the goods and documents in accordance with the procedure of operational inspection approved by the central tax administrator; 13) in the event of a reasonable suspicion that the income of a person has not been subject to taxation in accordance with the procedure prescribed by law or that property has been acquired with the funds that were not taxed in accordance with the procedure prescribed by the laws, to instruct persons to submit substantiated explanations in the form and subject to the procedure established by the central tax administrator concerning the sources of acquisition of property and receipt of income; 14) to apply to the taxpayer, other natural and legal persons (where related to exercising the rights of the tax administrator in respect of the taxpayer) and to instruct them to eliminate the circumstances and conditions precluding the tax administrator from performing its functions properly; 15) to take enforcement measures in respect of tax obligations; 16) to submit by proxy or transfer claims relating to the recovery of arrears in payments to the company Turto Bankas in accordance with the procedure established by the Minister of Finance; 17) within its sphere of competence, to bring legal action to court for the recognition of a transaction or part thereof as invalid; to be an applicant or a respondent in other cases in court; 18) to conduct a tax investigation; 19) to take photos and audio or video records without violating a person’s right to privacy guaranteed by laws; 20) to exercise other rights granted by tax and other laws. Article 34. Documentation of the Tax Administrator’s Actions When performing its functions and exercising the rights granted upon it by this Law, the tax administrator (officer) shall document its actions as decisions and other documents in the form and subject to the procedure of completing them as established by the central tax administrator. Article 35. Liability of the Tax Administrator 1. Where the tax administrator has caused damage to the taxpayer by illegal actions or failure to act, it must compensate for the damage so caused in accordance with the procedure prescribed by law. A tax officer whose direct actions or failure to act have caused damage shall be held liable in accordance with the procedure laid down in the Law on Civil Service and other legal acts. 2. Where a tax officer has performed illegal actions, he shall be held liable in accordance with the procedure prescribed by law. CHAPTER II TAXPAYER. RIGHTS AND OBLIGATIONS Article 36. Rights of the Taxpayer A taxpayer shall have the right: 1) to receive from the tax administrator, free of charge, information about taxes, tax reliefs, effective tax legislation and other information necessary to discharge tax obligations; 2) to receive consultancy on tax payment issues; 3) to request that tax overpayments be refunded (credited) in due time; 4) to directly participate or be represented (unless the laws explicitly prohibit such representation) by a legal or authorised representative in legal relations with the tax administrator , and also with respect to tax dispute settlement institutions; 5) to take part in the tax inspection process; 6) to provide explanations and replies concerning the inspection report; 7) to have access to decisions on the approval of an inspection report and other decisions by the tax administrator on the amount of tax obligations; 8) to refuse to comply with any illegal instructions of the tax administrator, including the right to refuse to provide information if the instruction given relates to the data which is not at the disposal of the taxpayer and which the taxpayer does not have to collect under effective legal acts; 9) to demand that the tax administrator, when performing administrative actions in respect of the taxpayer, should strictly comply with the procedures prescribed by tax legislation and should not exceed the powers conferred upon it; 10) to request that the secrecy of information about the taxpayer be ensured; 11) to request compensation for damage to property or non-pecuniary damage caused by illegal acts of the tax administrator; 12) to appeal, in accordance with the procedure prescribed by law, against any action or failure to act by the tax administrator (officer); 13) to exercise other rights granted by this and other laws and subordinate legal acts. Article 37. Consulting the Taxpayers 1. Consultancy to taxpayers on specific tax issues shall be provided by a tax administrator in accordance with the procedure and ways set by the central tax administrator. 2. The taxpayer shall not be obliged to comply with the tax advice provided. Article 38. Secrecy of Information about the Taxpayer 1. Information concerning the taxpayer, which is supplied to the tax administrator, shall be kept secret and used solely for legitimate purposes. 2. The following information shall not be kept secret: 1) the taxpayer identification number, also other identification numbers assigned to the taxpayer by the registers and databases of taxpayers; 2) the date of registering in and deleting from the register of taxpayers as well as other registers and databases referred to in subparagraph 1 of this paragraph; 3) the amount of taxes paid (credited) by the taxpayer that is a legal person. The amount of taxes paid (credited) by the taxpayer that is a natural person shall not be kept secret in the cases established by law; 4) the amount of arrears in payments by the taxpayer; 5) (repealed on 19 July 2007); 6) information concerning the violations of tax legislation where the taxpayer’s guilt has been proven. The taxpayer’s guilt shall be considered as proven where the taxpayer has not appealed against the tax administrator’s actions within the time limits and in accordance with the procedure set out in the laws or where the taxpayer has appealed against the tax administrator’s actions but the institution examining the appeal does not acknowledge such actions to be illegal by its decision and the taxpayer does not appeal against the decision within the time limits and in accordance with the procedure set out in the laws or where such a decision is final; 7) other information that is not considered as secret under the laws of the Republic of Lithuania. 3. The tax administrator may disclose the information specified in paragraph 2 of this Article without the taxpayer’s consent or knowledge. The cases, manner, scope and procedure of disclosing information concerning the taxpayer, which is available to the tax administrator and which is not considered as secret, to third persons shall be established by the central tax administrator within its sphere of competence, unless the laws provide otherwise. Article 39. Disclosure of Information about the Taxpayer 1. Information about the taxpayer may be provided to: 1) another Lithuanian tax administrator where it is necessary for the performance of its functions; 2) foreign tax administrations (competent authorities); 3) European Union competent authorities; 4) courts of law, law enforcement authorities, other state institutions and agencies, entities of operational activities and other persons in the cases provided for in the laws where it is necessary for the performance of their functions; 5) an institution authorised by the Government of the Republic of Lithuania to conduct an analysis of enterprise activities in accordance with the procedure established by the Government; 6) the Ministry of Finance for the performance of its functions; 7) state agencies administering official statistics for the performance of their functions; 8) the company Turto Bankas to the extent necessary for the recovery of arrears in payments transferred thereto; 9) other persons where the taxpayer requests so in writing or gives its consent (raises no objection) to the dissemination of such information. 2. A person who receives information under subparagraphs 1, 4-8 of paragraph 1 of this Article and also where such information becomes known to a person in the course of implementing the provisions of the agreement referred to in Article 31 of this Law must keep it secret. 3. The institutions specified in subparagraph 2 of paragraph 1 of this Article shall use the supplied information for the purposes of taxation and investigation of law violations in the field of taxes. The taxpayer may allow the aforementioned institutions to forward the supplied information to courts of law and law enforcement authorities, and also tax administrations (competent authorities) of third countries where necessary for the purpose of taxation or investigation of law violations in the field of taxes. 4. Information about the taxpayer shall be furnished in the manner provided for in legal acts and international treaties (agreements). 5. Legal persons that receive information pursuant to subparagraphs 1, 4-8 of paragraph 1 of this Article must ensure that the information received is made available only to those of their employees who are directly involved in the performance the functions for which such information is provided. The said legal persons must also ensure that each case of usage of the information received should be registered. 6. Where, in the cases specified in paragraph 1 of this Article, the tax administrator has supplied incorrect information about the taxpayer, it must correct the error as soon as it becomes aware of the fact. 7. A tax officer shall keep information about the taxpayer secret even after the end of their service, except for the cases specified in this Law. 8. The tax administrator and any other person who was supplied with or who became aware of secret information about the taxpayer shall be held liable for its disclosure in accordance with the procedure prescribed by the laws, except for the cases where the laws allow the disclosure thereof. Article 40. Duties of the Taxpayer The taxpayer must: 1) discharge tax obligations accurately and in due time; 2) cooperate with the tax administrator, follow its lawful instructions and not preclude the exercising of the rights granted upon it by law; 3) register as a taxpayer in accordance with the procedure prescribed by the legal acts, notify in due time and manner about any changes in the data contained in the register of taxpayers; 4) correctly calculate the tax in compliance with tax laws; 5) file tax returns and other documents specified in the legal acts in due time; 6) keep accounts, safekeep the accounting documents and registers as well as other documents in accordance with the procedure prescribed by the legal acts; 7) create the required conditions for the tax administrator to conduct on site inspections; 8) supply the tax administrator with all the documents, computerised accounting data and other information required for inspection purposes; 9) provide, in accordance with the procedure laid down in Article 42 of this Law, the tax administrator with information about opening an account with a foreign credit institution; 10) perform other functions set out in this and other laws and subordinate legal acts. Article 41. Submission of Explanations about the Sources of Acquisition of Property and Receipt of Income The taxpayer must, not later than within ten days (unless the tax administrator specifies otherwise) from the date of receipt of instructions from the tax administrator referred to in paragraph 13 of Article 33 of this Law, submit substantiated explanations concerning the sources of acquisition of property and receipt of income. Article 42. Submission of Information about the Opening and Closing of Accounts with Foreign Credit Institutions Legal persons registered in the Republic of Lithuania must notify the State Tax Inspectorate under the Ministry of Finance about all types of accounts opened or closed in foreign credit institutions not later than within five working days after the opening or closure of the account. Natural persons must notify about any opened or closed accounts in foreign credit institutions in accordance with the procedure and within the time limits set forth by the Government of the Republic of Lithuania or an institution authorised by it. Article 43. Register of Taxpayers 1. For the purpose of keeping a record of taxpayers and exercising control over the correct calculation, payment and withholding of taxes, a general register of taxpayers shall be set up. 2. The tax administrator (respective register management body) shall register all persons whose registration is obligatory under Article 45 of this Law. Article 44. Management of the Register of Taxpayers The procedure of collecting, accumulating, processing, systemising, storing, using and providing data on taxpayers shall be laid down in the Regulations for the Register of Taxpayers approved by the Government of the Republic of Lithuania. Article 45. Registration of Taxpayers 1. Unless the Regulations for the Register of Taxpayers provide otherwise, the person who has an obligation to pay taxes under the tax law must register with the respective local tax administrator (register management body) and provide data concerning the registration of the taxpayers specified in the Regulations for the Register of Taxpayers. 2. Natural persons receiving income incidental to employment relations or relations in their essence corresponding to employment relations shall register as taxpayers through their employer which is a withholding agent. 3. Taxpayers paying taxes on specific property shall be registered by the respective tax administrator (register management body) on the basis of information provided by an institution engaged in the legal registration of such property. 4. The tax administrator (respective register management body) may, on the basis of the information at its disposal and at its own initiative, register a person as a taxpayer or update the data thereon if the person fails to properly perform the obligations specified in Article 46 of this Law. The person registered as a taxpayer or the taxpayer whose data are updated shall be informed respectively about the aforementioned actions where the person’s address is known. Article 46. Timeframe for the Registration of Taxpayers. Notification of Modified or New Data 1. Unless the Regulations for the Register of Taxpayers provide otherwise, the person who has an obligation to pay taxes under the tax law must register with the respective local tax administrator performing the functions of a register management body within five working days after legal registration and, where legal registration is not prescribed by law or where the person engages in activity earlier than five working days after legal registration, not later than the day of the start of activities. 2. A person who has registered as a taxpayer must notify the respective tax administrator performing the functions of a register management body about any modified or new relevant data within five working days after such modification or the appearance of new data. 3. In the cases provided for in the Regulations for the Register of Taxpayers, the taxpayer shall not be required to submit the data (a part thereof) specified in paragraphs 1 and 2 of this Article directly to the tax administrator (register management body) if analogous data is submitted to the respective state register with which the administrator of the register of taxpayers has concluded a contract on the receipt of data. In such cases, the taxpayers shall be registered and the data thereon shall be updated in the register of taxpayers on the basis of information provided to the tax administrator by the respective state register. Article 47. The Taxpayer Identification Number 1. Every person registered as a taxpayer shall be assigned a taxpayer identification number. 2. The identification code of the legal entities register shall be used to identify legal persons; the identification code of the population register shall be used to identify natural persons. 3. Those taxpayers who, for some reason, cannot use the identification code of the legal entities register or the identification code of the population register, shall be assigned a taxpayer identification number to be applied in accordance with the procedure established by the central tax administrator (the leading register management body). 4. The taxpayers must specify their identification numbers in tax returns and other documents concerning payments to the budget. CHAPTER THREE THIRD PERSONS AND THEIR OBLIGATIONS Article 48. Purposes of Establishing Obligations for Third Persons The obligations of third persons in the field of applying tax administration procedures relating to the provision of information to the tax administrator, enforced recovery of arrears in payments and prevention of violations of tax laws shall be established with a view to ensuring the required conditions for an effective performance of the tax administrator’s functions. Article 49. Provision of Information Necessary for the Tax Administrator to Perform its Functions 1. Unless the laws provide otherwise, the information and data specified in subparagraph 1 of Article 33 of this Law as are necessary for the tax administrator to perform its functions shall be submitted not later than within ten days from the date of receipt of instructions from the relevant tax administrator or within a longer time limit set forth by the tax administrator. 2. Commercial or bank secrets may not serve as grounds for refusal to provide information. A professional secret may only serve as grounds for refusal to submit information where this is provided for in the laws and where this Law does not explicitly impose an obligation to submit the aforementioned information. Article 50. Information Provided by Bailiffs and Notaries 1. Bailiffs and notaries shall provide data to the tax administrator about those legal facts which may give rise to liability to tax, and also other information necessary for the tax administrator to perform its functions. 2. After coordination with the Minister of Justice, the Minister of Finance shall determine the type, scope, time limits and manner of providing the data and information referred to in paragraph 1 of this Article as well as the procedure of providing such data and information to the tax administrator. Article 51. Information Provided by Licence Issuing Authorities A licence issuing authority shall provide information to the tax administrator concerning the issue of licences for certain persons to engage in a specific activity, the suspension of such licences, the revocation of suspensions or the revocation of licences, in a manner and within the time limits set out in a contract concluded between the licence issuing authority and the central tax administrator. Article 52. Information Provided by Authorities Registering Objects, Rights in Rem and Legal Facts An authority that registers objects, rights in rem and legal facts shall provide information to the tax administrator about the objects it registers (or objects subject to registration) in a manner and within the time limits set out …